The yet-to-be-completed, 231-room Hilton Cabana Miami Beach will soon have new owners, as RLJ Lodging Trust recently announced that it has entered into a purchase and sale agreement to acquire the property upon completion for $71.6 million.
The hotel, which first opened in the early 1950s, was closed and gutted in 2007 in anticipation of a condominium conversion. As the conversion plan proved itself unsuccessful, the property went into foreclosure. The current owner purchased the property in 2011 with plans of developing a new hotel, set for completion in the fourth quarter of 2013.
Hilton Cabana Miami Beach will be located directly on the beach and benefit from a prime location along the 6200 block of Collins Avenue. Buyer RLJ Lodging Trust is also confident that the hotel’s association with a premium brand such as Hilton will yield strong demand from brand-loyal guests seeking accommodations in the area.
“We are thrilled to be entering the Miami Beach market. We see this acquisition as an excellent opportunity to enter a gateway market with multiple demand generators,” commented Thomas J. Baltimore, Jr., president and chief executive officer of RLJ Lodging Trust. “Furthermore, the Hilton brand is underrepresented in this market, which should provide for outsized performance from this hotel.”
According to Smith Travel Research, there are currently two Hilton-affiliated hotels that represent approximately one percent of the total rooms in the Miami Beach market. RLJ Lodging believes that Hilton Cabana Miami Beach will benefit from Miami’s steadily increasing transient demand, robust convention activity and strong ties to Latin America.
The Miami market, one of the top-ranked lodging markets in the nation, garners one of the highest average daily rates and one of the highest revenues per available room of any U.S. city, and is surpassed only by New York, Oahu Island and San Francisco.
Upon entering the agreement, RLJ Lodging Trust committed to a $7.2 million deposit that will be refunded if the hotel is not completed.
Image courtesy of TripAdvisor